Affordability, appetite and low availability would drive the relative resilience of WA’s property market over the next year, according to REIWA CEO Cath Hart.
“WA remains one of the most affordable markets in the country, our median house price of $540,000 is nearly half that of Sydney’s,” Ms Hart said at the annual API REIWA Residential Property Outlook breakfast today.
“And while Eastern States markets saw huge price growth before and during COVID, WA remained relatively stable. Prices have risen in the past couple of years, but they have made up for ground lost since 2014 and have not set the records seen over east.
“Our prices make borrowing more achievable relative to other areas, even with interest rate rises. The average loan in WA is $492,094, below the national average of $604,346. Meanwhile WA’s average weekly earnings are $2011, above the national average of $1,835.
“All this paints a picture of overall affordability and the ability to cope with change.”
Ms Hart said there was plenty of appetite for property in both the sales and rental markets, which was supported by population growth.
“Interstate and overseas migration both remain in positive territory, which we haven’t seen since 2013,” she said.
“WA’s population grew 1.3 per cent in the year to June 2022 and in its mid-year budget review the State Government increased forecast population growth for 2022/23 from 1.2 per cent to 1.5 per cent.
“All these people need houses. The demand is definitely there.”
Ms Hart highlighted the effect the mining industry had on the WA property market and the positive outlook.
“The mining industry has strong ties to the WA property market, supporting employment and attracting people to our state,” she said.
“Mining capital expenditure continues to trend upwards in WA and it is very important to watch this as there is some correlation between it and property prices.
“The good news is the longer-term expectations for mining capital expenditure are positive for WA – this will also help sustain housing demand and support the WA property market through any further interest rate rises.”
Ms Hart said the low availability of homes for sale was also maintaining the relative stability of the WA property market.
“Active listings, or the number of houses for sale at any given point in time, are at levels not seen in more than 12 years,” Ms Hart said.
“This figure might suggest there are not a lot of properties on the market, or not a lot of people want to sell, but it only tells part of the story.
“The number of new listings, or stock coming onto the market, is trending at similar levels to a few years ago. There is a good number of properties being listed.
“What is keeping active listings low is the selling time, which is fuelled by demand and signals underlying confidence in the WA market.
“In 2022, the median time to sell hovered at 16 days. While new listings are still coming on to the market and at reasonable levels, they are being snapped up quickly and this is keeping the overall active listings low.
“As I’ve mentioned, the appetite for property is likely to remain high so availability is likely to remain low, which will help support prices.”
Ms Hart reiterated REIWA’s expectation for low to moderate price growth over the year.
“Despite last week’s interest rate rise and the prospect of more, I am still confident we will see some low- to moderate-growth in the WA market over 2023, even if there are adjustments in the short-term,” she said.
REIWA will provide its next quarterly forecast update in April.
Sourced from REIWA